Consider the following scenarios and briefly explain how each scenario would affect price level and real GDP in Canada. Canada’s major trading partners experience severe recession. Canadian dollar depreciates in the foreign exchange market. Major technological breakthroughs lead to significant increase in productivity.
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q. Consider the following scenarios and briefly explain how each scenario would affect price level and real
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Canada’s major trading partners experience severe recession.
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Canadian dollar
depreciates in the foreign exchange market. -
Major technological breakthroughs lead to significant increase in productivity.
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- If young business professionals in America suddenly decide that driving German-made cars (=produced in Germany) is an important status symbol, net exports will tend to _____ causing aggregate demand to _____. Group of answer choices fall; rise fall; fall rise; fall rise; riseThis graph shows an increase in aggregate supply in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve (SRAS) shifts to the right from SRAS1 to SRAS2, causing the quantity of output supplied at a price level of 125 to rise from $250 billion to $350 billion.Country X, an open economy, has an increase in the demand for money which led to a significant increase in the real interest rates relative to the rest of the world. Explain how this increase in interest rates will affect each of the following for the Country X. Investment The international value of its currency Exports Using a correctly labelled aggregate demand and aggregate supply diagram, show how the change in investment you identified in part (a) will affect each of the following in the short run. Output The price level Identify one fiscal policy action that could counter the effect identified in part (b). Explain how this policy will affect each of the following. Output The price level Nominal interest rates i. Identify one monetary policy action that could counter the effects identified in part (b).…
- Country X, an open economy, has an increase in the demand for money which led to a significant increase in the real interest rates relative to the rest of the world. Explain how this increase in interest rates will affect each of the following for the Country X. Investment The international value of its currency Exports Using a correctly labelled aggregate demand and aggregate supply diagram, show how the change in investment you identified in part (a) will affect each of the following in the short run. Output The price level Identify one fiscal policy action that could counter the effect identified in part (b). Explain how this policy will affect each of the following. Output The price level Nominal interest rates i. Identify one monetary policy action that could counter the effects identified in part (b).…Country X, an open economy, has an increase in the demand for money which led to a significant increase in the real interest rates relative to the rest of the world. Explain how this increase in interest rates will affect each of the following for the Country X. Investment The international value of its currency Exports Using a correctly labelled aggregate demand and aggregate supply diagram, show how the change in investment you identified in part (a) will affect each of the following in the short run. Output The price level Identify one fiscal policy action that could counter the effect identified in part (b). Explain how this policy will affect each of the following. Output The price level Nominal interest rates i. Identify one monetary policy action that could counter the effects identified in part (b).…Supply-Side Policies: Supply-side policies involve measures to increase the production and and development. Supply-side policies can help to increase the potential output of the economy, efficiency of goods and services in the economy. This can include investments in education and training to improve the skills of workers, as well as incentives for businesses to invest in research which can help to mitigate the negative effects of a negative supply shock. However, these policies may take time to have an effect and may not be sufficient in the short term to address the immediate impacts of a negative supply shock. Explain this graphically please.
- A shift in aggregate demand curve to the left, means a. Increase in consumption b. Decrease in consumption c. Decrease in price level d. Increase in net exportWhich of the following is likely to result from a rapid rise in aggregate demand? Select one: a. Static living standards b. Increased unemployment c. Rising prices d. Surplus on the balance of paymentsSuppose the Canadian economy is currently at point K as shown in the diagram above. Explain briefly two events that could cause it to move to point N.
- Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: Current price level, labeled PL1 Current output, labelled Y1 Assume that Braveland, a major trading partner of Macroland, enters into a recession. Explain the effect on Macroland exports to Braveland On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. How would this change in real output in Macroland affect unemployment in Macroland? Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro. Explain whether the euro will appreciate, depreciate, or remain…Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: Current price level, labeled PL1 Current output, labelled Y1 Assume that Braveland, a major trading partner of Macroland, enters into a recession. Explain the effect on Macroland exports to Braveland On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. How would this change in real output in Macroland affect unemployment in Macroland? Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro. Explain whether the euro will appreciate, depreciate, or remain…Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following: Current price level, labeled PL1 Current output, labelled Y1 Assume that Braveland, a major trading partner of Macroland, enters into a recession. Explain the effect on Macroland exports to Braveland On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland. How would this change in real output in Macroland affect unemployment in Macroland? Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro. Explain whether the euro will appreciate, depreciate, or remain…